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Wednesday, 25 February 2015

SWAZI HUMAN RIGHTS WORSEN: AMNESTY

The rule of law, access to effective remedies and protection of human rights in Swaziland continued to deteriorate in the past year as a consequence of the further undermining of judicial independence, Amnesty International said in its annual report.

‘Activists were also detained and charged in several separate trials involving charges under the Suppression of Terrorism Act (STA) and the Sedition and Subversive Activities Act,’ Amnesty stated. 

The report published on Tuesday (24 February 2015) said the kingdom, ruled by King Mswati III, sub-Saharan Africa’s last absolute monarch, revived a 2009 sedition charge against Thulani Maseko. His trial on this charge was scheduled to be heard in 2015. A challenge to the constitutionality of the Sedition and Subversive Activities Act, as well as the STA, was also pending in 2015. 

Amnesty reported, ‘The challenge was brought by veteran activist and leader of the opposition People’s United Democratic Movement (PUDEMO), Mario Masuku, and eight others facing charges under both laws in three separate trials. The application was due to be heard in the High Court in March 2015.’

The trial of Mario Masuku and youth leader Maxwell Dlamini was due to begin in February 2015. They were charged with sedition and remanded in custody in connection with slogans they allegedly shouted at a 2014 May Day rally. 

Amnesty reported, ‘There was considerable concern at Mario Masuku’s deteriorating health after he was remanded into custody. At the end of October there was a renewed attempt to secure his and Maxwell Dlamini’s release on bail. On 31 October the High Court judge scheduled to hear the application was withdrawn. The application was heard and rejected in November by Judge Mpendulo Simelane.’

Seven members of PUDEMO, which is banned under the STA, were also facing trial at the end of the year on charges under the STA following their arrest at the High Court during the trial of Thulani Maseko and Bheki Makhubu in April, who were later jailed for contempt of court for writing and publishing articles in the Nation magazine critical of the Swazi judiciary.

See also


LEGAL CHALLENGE TO SWAZI TERROR LAW
AMNESTY ATTACKS SWAZI JUSTICE

Monday, 23 February 2015

SWAZI KING ATTACKS LAVISH LIFESTYLES

King Mswati III of Swaziland has instructed the kingdom’s revenue authority to pursue people who live lavish lifestyles to ensure they are paying their tax.

The King, who is sub-Saharan Africa’s last absolute monarch, himself has 13 palaces, a private jet and fleets of top-of-the-range Mercedes and BMW cars. He and his royal family regularly take expensive international trips.

The King pays no tax.

In a speech opening the Swazi Parliament on Thursday (19 February 2015), the King said, ‘Time has also come for the authority to fast track the programme of lifestyle audits.’

After the King’s speech was delivered, the Times of Swaziland, the only independent daily newspaper in the kingdom reported, ‘[Swaziland Revenue Authority] General (CG) Dumisani Masilela told this reporter that qualified personnel had been recruited to carry out the lifestyle audit function aimed at cracking the whip on those involved in corrupt ways of generating income.’

The source of much of King Mswati’s income remains secret. In 2009, Forbes magazine estimated that the King himself had a personal net fortune worth US$200 million. Forbes also said King Mswati was the beneficiary of two funds created by his father Sobhuza II in trust for the Swazi nation. During his reign, he has absolute discretion over use of the income. The trust has been estimated to be worth US$10 billion.  

In August 2014 the Sunday Times newspaper in South Africa reported King Mswati personally received millions of dollars from international companies such as phone giant MTN; sugar conglomerates Illovo and Remgro; Sun International hotels and beverages firm SAB Millerto.

It reported that MTN, which has a monopoly of the cell phone business in Swaziland, paid dividends directly to the King. He holds 10 percent of the shares in MTN in Swaziland and is referred to by the company as an ‘esteemed shareholder’. It said MTN had paid R114 million (US$11.4 million) to the King over the past five years.

The newspaper also reported that the King was receiving income from Tibiyo Taka Ngwane, which paid dividends in 2013 of R218.1 million. The newspaper reported ‘several sources’ who said it was ‘an open secret’ that although money generated by Tibiyo was meant to be used for the benefit of the nation, Tibiyo in fact channelled money directly to the Royal Family.

Meanwhile, seven in ten of Swaziland’s tiny 1.4 million population live in abject poverty with incomes less than US$2 a day; three in ten are so hungry they are medically diagnosed as malnourished and the kingdom has the highest rate of HIV infection in the world.

At the last national budget in Swaziland in 2014 the King’s annual household budget increased by more than 10 percent to US$61m, this was on top of the 13 percent increase he had in 2013.

The AFP news agency reported in May 2014 that the figure also included provisions for construction work on palaces that would cost the tax payer about $12.6m.

Observers note that the King has had many chances in the past to cut back on his spending and reduce the amount of money he takes from his subjects, but so far he has increased his budget, rather than reduced it. In 2011, as Swaziland hurtled towards financial meltdown, Majozi Sithole, the then Finance Minister, in his budget demanded 10 percent budget cuts (later increased further) from government departments, but in the same budget the amount of money given to the King increased by 23 percent.

See also

KING AT CENTRE OF IRON MINE FAILURE
ONLY KING GAINS FROM MINE FAILURE
HYPOCRISY OF KING MSWATI III

Friday, 20 February 2015

MEDIA BACK KING’S FALSE HIV PROMISE

Newspapers in Swaziland lost their critical faculties when they reported that King Mswati ‘would personally’ eradicate HIV and AIDS in the kingdom by 2022.

The King made his statement while opening the Swazi Parliament on Thursday (19 February 2015).

In a confused passage in his speech, King Mswati, who rules Swaziland as sub-Saharan Africa’s last absolute monarch, said, ‘I wish to assure the nation that I will personally see to it that the first world Swaziland is HIV /AIDS free.’

Both the Swazi Observer and the Times of Swaziland, the kingdom’s only two daily newspapers, reported this to mean the King had set himself a deadline of 2022; he has many times in the past said Swaziland would be a ‘First World’ nation by 2022.

The newspapers reported the King’s promise prominently.  The Observer, which is in effect owned by the King, reported, ‘There was unprecedented clapping of hands in the House of Assembly as His Majesty King Mswati III assured the Swazi nation that he would personally see to it that the First World Swaziland is HIV and AIDS free. 

‘Ordinarily, parliamentarians and invited guests shout Bayethe when the King sends a message they fully support, but the gathering was besides itself as the King made this commitment.’

The Times, a privately-owned paper, called it a ‘bold declaration’. It added, ‘This means that the country will be free of the epidemic in seven years’ time.’

The King gave no further information about how he would achieve this goal. The newspapers reported the King’s announcement without criticism. At present there is no cure for HIV, so it could be interpreted that the King personally intends to find that cure.

With 26 percent of adults in the 15-49 age group HIV positive, Swaziland has the world’s highest estimated prevalence rate of HIV-infected adults. In addition, Swaziland’s tuberculosis (TB) incidence rate is the highest in the world and 80 percent of TB patients are co-infected with HIV. 

The catastrophic effect of HIV and AIDS on Swaziland's mortality rates has created a society in which about 15 percent of the 1.2 million population are orphans and vulnerable children, many of whom live in child-headed households.

King Mswati has a long history of unusual responses to the HIV pandemic. In 2014, it was reported his kingdom would pay teenaged girls E200 (about US$20) per month if they refused to have sex. 

The South African news organisation IoL reported Thabsile Dlamini, a health care worker in Manzini, saying, ‘The government will pay girls the allowances so they will have money to purchase necessities and can turn down money offered to them for sex.’

In 2001, King Mswati banned ‘young maidens’ from having sex for five years to halt the spread of HIV/Aids. Any man who contravened the maidens' chastity rule was to be fined one cow. 

Later, the BBC reported, ‘King Mswati transgressed the ban when he took a 17-year-old girl as his ninth wife just two months after imposing the sex ban in September 2001, sparking unprecedented protests by Swazi women outside the royal palace.’

KING SILENT ON US$10m PERSONAL LOAN

King Mswati III of Swaziland has spoken publicly for the first time about the closure of the Ngwenya Iron Ore Mine, but he did not say why he took US$10 million from the company that ran the mine shortly before it went out of business or what he did with the money.

The King made a passing reference to the Ngwenya Iron Ore Mine, but did not mention it by name, during his speech opening the Swazi Parliament on Thursday (19 February 2015).

The King, who rules Swaziland as sub-Saharan Africa’s last absolute monarch, said ‘The effect of falling global prices of minerals, such as iron ore, was also evident in the mining sector where production was halted in the last quarter of 2014, following a plunge in international prices.

‘This problem has affected many services which resulted in job losses.’

The King has been at the centre of international attention after it was revealed that he took a US$10 million loan from SG Iron (formerly known as Salgaocar Swaziland) the company he awarded a licence to mine at Ngwenya. The King and Sihle Dlamini, his personal representative on the board of directors, were at the heart of events that led to SG Iron’s collapse.

It had debts of US$4 million when it was forced to cease trading in August 2014 and more than 700 jobs were lost. King Mswati took the loan from the company less than six months after it started trading which he refused to repay when the company hit difficulties.

The King, through his representative Dlamini, blocked the company from selling its iron ore, which meant the company had no income. It had reserves stockpiled that could have fetched at least US$5.5 million (more than enough to clear its debts) if sold when the company folded.

Despite repeated requests from SG Iron, the King’s personal representative, refused to allow the ore to be sold. 

A compensation claim for at least US$141 million has been prepared by SARL against the Kingdom of Swaziland at the International Centre for Settlement of Investment Disputes (ICSID).

See also

HOW SWAZI KING DESTROYED IRON MINE
MYSTERY OF SWAZI KING’S 10m LOAN
KING AT CENTRE OF IRON MINE FAILURE
 
ONLY KING GAINS FROM MINE FAILURE
http://swazimedia.blogspot.com/2015/02/only-king-gains-from-mine-failure.html

Thursday, 19 February 2015

JAILED JOURNALISTS CASE GOES TO UN



Leading international lawyers are asking a United Nations working group to rule whether the jailing of a Swaziland magazine editor and human rights lawyer for publishing articles critical of the kingdom’s judiciary are lawful.

They have filed a petition with the UN Working Group on Arbitrary Detention (UNWGAD) in Geneva regarding the cases of Bheki Makhubu, the editor of the Nation magazine and Thulani Maseko, a lawyer and writer.

The American Bar Association’s Center for Human Rights, the global law firm Hogan Lovells and the International Commission of Jurists (ICJ) jointly produced a petition calling for the UNWGAD to issue an opinion regarding the lawfulness of the continued incarceration of the two men.

They allege a range of human rights violations by Swaziland, where King Mswati III rules as sub-Saharan Africa’s last absolute monarch..

Wilder Tayler, ICJ’s Secretary General, said, ‘The consequences of this arbitrary action against Thulani Maseko have not only violated his rights and exacted a heavy personal toll, but have also highlighted the rule of law deficit in Swaziland. Thulani Maseko has been denied his right to express an opinion on public affairs and the administration of justice, guaranteed under international law and affirmed in the UN Basic principles on the Role of lawyers.’

Thulani Maseko and journalist Bheki Makhubu were charged with two counts of contempt of court emanating from articles published in the Nation in February and March 2014, in which they questioned circumstances surrounding the arrest of a government vehicle inspector.

They were sentenced to two years of imprisonment, without the alternative option of a fine at the end of a trial largely condemned by leading international rights groups as unfair and not complying with international standards on the right to a fair trial.

In a statement the ICJ said, ‘Some of the fair trial guarantees that have been breached, according to the legal petition filed with the UNGWAD, include the right to be tried by an independent and impartial tribunal; right to a public hearing; right to a legal counsel; right to the presumption of innocence; right to bail; and right to protection of the law.’

Marc Gottridge, partner at Hogan Lovells, said,‘The use of contempt of court proceedings to suppress the right to freedom of expression is a violation of international human rights law. The right to freedom of expression is guaranteed in the Swazi constitution and international law, including treaties to which Swaziland is a party.

‘The general failings of the Swazi judiciary with respect to independence and impartiality makes it reasonable to conclude that there cannot be an effective domestic remedy for Thulani Maseko.’

See also

SCHOOL BEATINGS OUT OF CONTROL

In the latest in a long line of cases of physical abuse of children at schools in Swaziland, a headteacher reportedly gave a boy 15 strokes of the cane after he was caught not wearing his necktie correctly. 

The Times of Swaziland reported the headteacher Mayiwane High School Anderson Mkhonta ‘admitted unleashing 15 strokes to a Form 1 pupil’.

The newspaper reported, ‘Mkhonta says he gave the strokes in intervals, as permitted by the law governing the administration of corporal punishment.’

The Times said the headteacher accused the boy of three offences: not tucking in his school shirt, not properly wearing his necktie and for being seen outside class during lessons.

The newspaper reported Mkhonta told the pupil that he would treat each of the offences separately, stating that a certain number of strokes would be given for each of the three offences and then he administered 15 strokes on the pupil’s buttocks. 

The abuse of children in schools has a long history in Swaziland. The headteacher at Salesian Catholic High School, Swaziland forces boys to lower their trousers so he can beat them on their bare buttocks.
Outraged parents reported head teacher Petross Horton to the Swaziland Action Group Against Abuse (SWAGAA). Parents described the bare-bottomed beatings as, ‘indecent harassment and brutality’.

Although corporal punishment of children is legal in Swaziland, there are rules about how it can be administered, which do not include floggings on the bare flesh.
Teachers across Swaziland regularly ignore the regulations and abuse schoolchildren.
In 2012, Save the Children Swaziland condemned teachers at Lusoti Primary for beating all the children at the school after one pupil made a noise in assembly.
In October 2011, the same group told the United Nations Human Rights Periodic Review held in Geneva that corporal punishment in Swazi schools was out of control. It highlighted Mhlatane High School in northern Swaziland where it said pupils were ‘tortured’ in the name of punishment. It said, ‘Teachers can administer as many strokes [of the cane] as they desire, much against the limit stipulated in the regulations from the Ministry of Education.’
In a separate case, girls at Mpofu High School were flogged by teachers on their bare flesh and if they resisted they were chained down so the beating could continue. The girls reported they received up to 40 strokes at a time.
In another case, a 10-year-old girl at kaLanga Nazarene Primary school was blinded for life in her left eye after a splinter from a teacher’s stick flew and struck it during punishment. And she was not the child being punished. She was injured when her teacher was hitting another pupil, with a stick which broke.

Children at Emtfonjeni High School were whipped with up to 10 strokes of a stick, because their school fees have not been paid. A majority of the pupils at the school are orphaned and depend on government to pay for their fees. 


A pupil at Mafucula High school was thrashed so hard that he later collapsed unconscious and had to be rushed to a clinic. Six pupils were thrashed with 20 strokes of a ‘small log’ because they were singing in class. It was reported that the boy who became unconscious was not one of those misbehaving, but he was flogged nonetheless.

The principal at Elangeni High, even publicly flogs adults who date pupils at his school. The men are forced to attend in front of the entire school, lie down on a bench and receive a whipping. The girls are also flogged.
See also
SCHOOL FLOGS BOYS ON BARE BUTTOCKS
SWAZI SCHOOL ‘TORTURES’ STUDENTS

CHILDREN CHAINED AND FLOGGED BARE
PROBE VICIOUS SCHOOL BEATINGS

SCHOOL FLOGGINGS OUT OF CONTROL
 
SCHOOL HEAD PUBLICLY FLOGS ADULTS

Thursday, 12 February 2015

JAILED JOURNALIST REMAINS DEFIANT

The Swaziland human rights lawyer and journalist Thulani Maseko has vowed that he will not seek bail pending an appeal of his jail sentence for contempt of court because he has been imprisoned unjustly.

Maseko and Bheki Makhubu were arrested in March 2014 and subsequently jailed for two years after they wrote and published articles critical of the Swazi judiciary in the Nation magazine.

Writing from his jail cell for the February 2015 edition of the Nation, Maseko said, ‘I have refused to apply for bail because we are in prison for expressing dissent and pointing out to an injustice. And jail time will not change this fact. We are in jail not by mistake, but because of a clean and clear conscience, and we are innocent of the crimes for which we have been sentenced. Those who are keeping us in jail are the guilty ones; and I cannot beg them for my release.’

He wrote, ‘As I concluded the statement of defense from the dock on June 05, 2014, I said: “I do not, for a moment, believe that in finding me guilty and imposing a penalty on me for the charge I face, the court should be moved by the belief that penalties deter men from a cause they believe is right. History shows that penalties do not deter men and women when their conscience is aroused.”’

The jailing of Maseko and Makhubu sparked an international outcry. Amnesty International named them ‘prisoners of conscience’.

The International Commission of Jurists (ICJ) in a statement said, ‘The Court’s ruling and events that transpired before it fall short of Swaziland’s international obligations to respect the rights to freedom of expression and fair trial.’

It added, ‘The conviction of Thulani and Bheki shows that the law as implemented in Swaziland does not adequately protect the right to freedom of expression and that it unduly shields the courts from public scrutiny.’

Kerry Kennedy, President of the Robert F. Kennedy Center for Justice and Human Rights, based in Washington, said in a statement, ‘This arbitrary decision makes a mockery of justice and deals a severe blow to freedom of expression in Swaziland. King Mswati III must act swiftly to reaffirm the rule of law in his country and to ensure that his citizens’ fundamental human rights are protected.’

King Mswati rules Swaziland as sub-Saharan Africa’s last absolute monarch and appoints the judges in his kingdom.

Sue Valentine, Africa Program Coordinator of the Committee to Project Journalists (CPJ) in Cape Town, said, ‘[The] ruling is an indictment of the thin-skinned Swazi judiciary that serves a monarch and denies citizens the basic right of freedom of expression.’

Freedom House, in Washington, called the conviction a ‘show trial’. Jenai Cox, program manager for Africa programs at Freedom House, said, ‘The judiciary has become an instrument of repression, as King Mswati attempts secure his grip on power.’

In October 2014, Makhubu, who edits the Nation, won the Press Freedom Award at the CNN / Multichoice Journalism Awards.

 
See also

Monday, 9 February 2015

HOW SWAZI KING DESTROYED IRON MINE

Swaziland’s absolute monarch King Mswati III and his personal representative Sihle Dlamini were at the very heart of events that led to the collapse of the mining company SG Iron at the Ngwenya Iron Ore Mine. It had debts of US$4 million when it closed and more than 700 jobs were lost. King Mswati took a US$10 million loan from the company less than six months after it started trading which he refused to pay back when it hit difficulties. 

 
A compensation claim for at least US$141 million has been prepared by Southern Africa Resources Ltd (SARL), against the Kingdom of Swaziland at the International Centre for Settlement of Investment Disputes (ICSID).

SARL held a 50 percent stake in SG Iron Ore Mining (PTY) Ltd (SG Iron), which had formerly been known as Salgaocar Swaziland (PTY) Ltd. The Swaziland Government held 25 percent of the shares and the King personally held 25 percent ‘in trust for the nation.’ 

The mine was forced to cease trading in August 2014 after a series of events orchestrated by Sihle Dlamini, who is Director Administration at the King’s Office and Assistant Private Secretary to the King. He was also the King’s personal representative on the SG Iron board of directors.

Here is a step by step guide to what happened.

30 September 2010

SG Iron Ore Mining (PTY) Ltd. (when it was still called Salgaocar Swaziland (PTY) Ltd), was registered in accordance with the laws of Swaziland on 30 September 2010 under Certificate of Incorporation No.1196, with its principal business of operations at the Old Ngwenya Mine, Ngwenya, in the Hhohho district of Swaziland.

SG Iron’s stated goal was to reprocess iron ore dumps left over by the Anglo American Mining Company in the late 1970’s, when it ceased mining operations in the area, and to secure the main mine lease for 30 years once the iron ore dumps had been cleared. 

Due to advancements in technology, it had become scientifically possible to process the dumps and upgrade them into sellable grade ore. This project would create new jobs in Swaziland, while creating a new source of wealth for Swaziland, as well as clearing Swaziland of the dumps left by the Anglo American Mining Corporation and restarting mining activities.

30 June 2011

King Mswati, who as absolute monarch in Swaziland has sole control over mining rights in the kingdom, granted SG Iron a Mining Lease for seven years. The company agreed to pay the King ‘in trust for the Swazi Nation’ a royalty of 3 percent. It also gave the King 25 percent of the total company issued share capital at no cost. It also gave a further 25 percent of the issued share capital to the Swaziland Government, again at no cost. The remaining 50 percent of issued share capital went to SARL.

The King holds shares ‘in trust for the Swazi Nation’, but it is widely reported outside of Swaziland that in fact he has received millions of dollars from international companies such as phone giant MTN; sugar conglomerates Illovo and Remgro; Sun International hotels and beverages firm SAB Millerto, which he spends on himself and his family. 

The King, who rules over an impoverished kingdom of only 1.4 million people, has 13 palaces, a fleet of top-of-the range BMS and Mercedes cars and a private jet airplane. Meanwhile, seven in ten of his subjects exist on incomes of less than US$2 per day.

As a general undertaking, the Mining Lease provided that each party should ‘act in such manner as shall be necessary in order to give effect to [the] Mining lease’. That mean they should all have worked to make sure the company was a success. 

It was agreed SARL, being the 50 percent shareholder of SG Iron, had management control of SG Iron, which was in charge of, and responsible for, day-to-day running of SG Iron. SARL was to provide all financial support and technical expertise necessary for SG IRON to succeed.

Article 6.8 of the Mining Lease provided that the Chairman in addition to having his own vote on the Board of Directors should have a casting vote. Shanmuga Rethenam was appointed as the Executive Chairman of the Board of Directors of SG Iron, and Sivarama Petla was appointed as its Chief Executive Officer. Both Executive Chairman and CEO were nominee and representatives of SARL.

Mbuso Dlamini was appointed as the Director for and on behalf of the Swaziland Government and Sihle Dlamini was appointed as the Director for and on behalf of the King.

SG Iron put up approximately US$50 million to start the mining operations and added further capital. The King and the Swaziland Government made no financial contributions.

21 October 2011

The official inauguration of operations was on 21 October 2011 with the dispatch of ore to Maputo Port in Mozambique. On 21 December 2011, the first shipment was carried out from Maputo Port and on 9 March 2012, a rail services from Mpaka to Maputo Port, Mozambique, started.

16 April 2012

Less than six months after operations began, King Mswati, through his representative Sihle Dlamini, asked for and received an advanced payment / loan of US$10 million on the King’s future dividend. This was at a meeting of the Board of Directors of Salgaocar Swaziland held in Mbabane, Swaziland, on 16 April 2012. The money was to be repaid from future dividends payable to the King. 

There was no public announcement made that the King received the money which he held ‘in trust for the nation’ and it is not known how he spent it. This later fuelled speculation that he had used the money to fund his own personal lavish lifestyle. 

26 April 2012

Reports began to appear on the Internet and later in newspapers in Swaziland that King Mswati had taken delivery of a private Douglas DC-9 jet and that it had been given to him as a gift by Salgaocar. 

The company refused to confirm or deny the gift. The Swazi Government was lukewarm in its denial. The Times of Swaziland reported, ‘Dismissing the rumours, government Press Secretary Percy Simelane said “That is pure speculation.  The donor has asked to remain anonymous and it will be like that.”’  

Barnabas Dlamini, the Swazi Prime Minister, claimed to the media that the jet had been donated by ‘development partners’ of Swaziland.  

21August 2014

Sihle Dlamini, representing the King at SG Iron wrote to the CEO of SG Iron, Sivarama Petla, instructing him not to sell any more cargo on 21 August 2014. He did this without consulting the major shareholder, SARL. Since that day all attempts by SG Iron to sell cargo were blocked.

Contrary to the terms of the Mining Lease, the Board of Directors was not consulted about the decision to stop sales of iron ore. The Chairman, who was to chair all board meetings under Article 6.7 of the Mining Lease, and who also possessed a right of veto, was not even informed of the King’s decision.
In October 2014, in a founding affidavit at the Swaziland High Court to have the company placed under Judicial Management, Sihle Dlamini would state that a shareholders dispute at SARL in Singapore had made it impossible for management decisions to be taken at SG Iron. He also stated that the fall in the world price of iron ore had made production at the mine uneconomical.

After 21 August 2014

Blocking the sale of iron ore meant no trade could take place and SG Iron’s operations were brought to an abrupt standstill. Since no money was coming into the company from the sale of cargoes there was a cash-flow crisis. 

Sales could have resumed at any time because more than 100,000 tonnes of iron ore remained at Maputo Port, Mpaka Railway Siding and at the Mine Stockyard. In his High Court affidavit in October 2014, Sihle Dlamini revealed he had given instructions for ore to be stockpiled until the price of iron ore recovered.

SARL also requested that the King repay the full or part of the US$10 million loan / advance dividend to allow SG Iron to continue operating. The King refused to do this, instead the King’s representative Sihle Dlamini demanded that SARL inject more capital into the business, something it would not do while shipment of cargoes remained blocked.

SARL would say in January 2015 that it felt it had been held hostage by the King’s representative’s decision to unilaterally stop all shipments of cargo.

22 September 2014

At a board meeting of SG Iron held in Mbanane, Sihle Dlamini representing the King and Mbuso Dlamini, representing the Swazi Government, expressed dissatisfaction at the status of the company, saying that a shareholder dispute at SARL was impacting on SG Iron, something which was disputed by SG Iron.

The two men gave an ultimatum that fresh funds should be injected into the project no later than 26 September 2014. The Chairman of SG Iron, appointed by SARL, was present at this board meeting, and he requested that management allow the sale of the cargo, which would release sufficient funds to keep the company operating.

SARL again requested that the King should, ‘for the good of the company’s workers, its shareholders and the kingdom of Swaziland’, repay the full or part of the US$10 million loan / advance dividend to allow the continued operation of SG Iron. Sihle Dlamini, the King’s representative, refused.

Subsequent to the meeting, Sihle Dlamini, representing the King, asked SARL to wipe out the US$10 million loan.

29 September 2014

In a letter dated 29 September 2014, SARL refused to write off the King’s debt. SARL said in January 2015 that in response to this, Sihle Dlamini took a unilateral decision to stop operations and place the company into Judicial Management and then liquidation. This decision was taken without discussions with the major shareholder or considering the voting rights in place at SG Iron.

3 October 2014

Sihle Dlamini representing the King and Mbuso Dlamini, representing the Swaziland Government, called for a meeting of the Board of Directors and despite being told by the Chairman of the Board Shanmuga Rethenam that he could not attend, they went ahead with the meeting without him.

This was the first Board Meeting that had been held without the Chairman’s presence in the history of SG Iron. Sihle Dlamini, the King’s representative, served as the Chairman of the meeting, although he represented only 25 percent of the company’s share capital and SARL, the 50 percent shareholder, was supposed to have control of the board.

Sihle Dlamini and Mbuso Dlamani both resolved to place SG Iron under Judicial Management, without seeking the Chairman’s consent, rather than permitting operations and cargo sale to continue.

10 October 2014

SG Iron was placed under provisional Judicial Management by an Order of the High Court of Swaziland dated 10 October 2014. This order was based on the founding affidavit of Sihle Dlamini, the King’s representative. The Judicial Manager was able to immediately take control and assess the affairs, assets and liabilities of SG Iron.

In his statement, Dlamini said the company, ‘commenced operations on the 21st of October 2011 and it has been extremely successful to date and has been a major income earner for the Kingdom of Swaziland.

‘[It] has also provided a number of investment opportunities to local transport contractors, construction companies and heavy plant and machinery contractors who carry out the bulk of its mining operations at Ngwenya.’

He added the company, ‘is not in an insolvent position in that its assets exceed its liabilities’. He said, however, the Board of Directors had ‘become hamstrung’ and was unable to take effective decisions on the operations of the company.

He said, ‘During or about December 2013, a serious shareholder dispute arose between the shareholders of the investor SARL, which dispute has resulted in arbitration proceedings being instituted between themselves in Singapore.’

He said he was not, ‘fully apprised of the nature of the dispute’, but nonetheless believed it meant that SARL representatives on the Board of SG Iron were unable to take decisions.

Sihle Dlamini also said that the falling price of iron ore had impacted the company. He said the price fell from E1,360 (about US$136) per tonne in January / February 2014 to E550 (US$55) per tonne. This was a new six-year low of the price of iron ore. 

‘It also effectively meant that the cost of processing the ore now at the present moment exceeds the price that [SG Iron] is able to obtain for the ore on the international market. In other words, it has become financially impossible to continue to mine.’

He stated, ‘Currently, as at 30 September 2014 [SG Iron’s] total indebtedness to its creditors amounted to approximately E42 million (US$4.2 million). Although that amount seems large, [SG Iron] would very easily be able to pay these creditors if it were in a position to sell the product that it currently has and more so if the price of iron ore recovers.’

However, he did not report that even at the lowest price of US$55 per tonne, if he himself, as the King’s representative, were to permit the 100,000 tonnes of ore stockpiled to be sold it would raise US$5.5 million, more than the US$4.2 million SG Iron owed its creditors.

In his statement, Sihle Dlamini made no reference to the US$10 million loan that had been made to the King that he subsequently refused to pay back.

16 December 2014

On the request of the Judicial Manager appointed by the Court, the Court ordered the provisional liquidation, or winding up, of SG Iron by an Order dated 16 December 2014.

22 January 2015

A Notice of Investment Dispute from SARL prepared for the International Centre for Settlement of Investment Disputes (ICSID) on 22 January 2015 stated the Judicial Manager, who it said was controlled by the King through Sihle Dlamini and Mbuso Dlamini, informed all creditors / vendors of SG Iron of its provisional liquidation, but failed to inform its largest creditor and primary shareholder, SARL, in writing of the event. He also failed to inform Eltina Limited, a major creditor of SG Iron, who bought the cargo of SG Iron and had provided US$10 million as a loan to SG Iron.

SARL reported. ‘The Judicial Manager met with [Sihle Dlamini and Mbuso Dlamini] the Director representing the King and Government almost every day and took instructions only from them’, not the SARL directors, or Eltina Limited. 

SARL reported, ‘[SARL] should have been given the opportunity to put forward their case before the Judicial Manager, since there were numerous alternatives to revive the company, in a violation of their due process rights they have not been allowed to do so by [the Swaziland directors].’

SARL added the Judicial Manager, ‘acting solely on the instructions of [the King’s] representatives, wholly failed his duty’, and when SARL and Rethenam, as Chairman of SG Iron, asked to sell cargo at a higher price even to its own competitor, the Judicial Manager ignored this request. 

‘The only possible explanation for his refusal was that [the Swaziland representatives] knew that, if a cargo was sold, the company would receive cash flow and SG Iron could not be liquidated.’

The closure of the mining project cost 700 people their jobs in Swaziland and it was estimated that several hundred jobs were also lost at the Port of Maputo, Mozambique.

SARL also reported that it had ‘direct evidence’ that the mine was being guarded by the Umbutfo Swaziland Defense Force. 

‘[King Mswati III] is the Commander-in-Chief of the Umbutfo Swaziland Defense Force, providing further evidence of the wholesale expropriation of [SARL’s] investment by state organs of [Swaziland] including the King’s Office, [Swaziland’s] judiciary and [Swaziland’s] military,’ it stated.

SARL added that as a result of SARL’s closure its ‘investment has been expropriated’, and the King’s US$10 million dividend / loan ‘has been written off by judicial decree’.

SARL added, ‘Having expropriated [SARL’s] investments and avoided the repayment of US$56 million in loans to finance the investment, it is understood that the Judicial Manager is now attempting to sell SG Iron to third parties for a song.’

The notice stated it had ‘suffered direct harm in the amount of no less than US$141,147,440.17, for the direct financial consequences of the behaviour of the King and his representatives.

In addition it is claiming US$57,186,022.53 for its advance and loan owed by SG Iron to SARL. SARL also stated that Eltina Limited was owed US$5,426,954.66.

In its notice of investment dispute, SARL said the order from Sihle Dlamini issued in August 2014 that no more iron ore should be sold was ‘a deliberate attempt to create an artificial cash crisis’ at SG Iron in order to gain control of the company and expropriate the company of its investments. 

SARL linked the move to destroy the company to 6 April 2012 when the request was made by King Mswati III, for the US$10 million loan.

‘It appears to be the desire to avoid the repayment of this advance dividend / loan to HMK [His Majesty the King] that lies at the root of the expropriation of [SARL’s] investments in Swaziland,’ SARL stated.

1 February 2015

The Observer on Sunday, a newspaper in Swaziland, in effect owned by King Mswati, attacked SARL and its Notice of Investment Dispute. It quoted Sihle Dlamini, who called the notice ‘a smear campaign’. He also likened SARL to ‘terrorist’ organisations.

Following publication of this article, William Kirtley, attorney to SARL, wrote to the Observer, to say, ‘The only person who stood to gain anything from this was HMK [the King], since the joint venture had provided an advance payment / loan of  US$10 million and, indeed, during one of the final board meetings it was repeatedly requested that this be written off SG Iron’s books.’

8 February 2015
The Observer on Sunday, part of the Swazi Observer group of newspapers, in effect owned by King Mswati and described by the Media Institute of Southern Africa in a 2013 report on press freedom in the kingdom as ‘a pure propaganda machine for the royal family’, attacked SARL and said it was, ‘lying by claiming to have filed a notice of arbitration with the International Centre for Settlement of Investment Disputes (ICSID) against the Kingdom of Swaziland’. It said it had proof that no such notice had been lodged.

In fact, SARL had never claimed to have ‘filed a notice of arbitration.’ In a media release dated 29 January 2015, it was announced SARL had submitted ‘a notice of investment dispute’.  A notice of investment dispute is first filed to see if the amicable resolution of a dispute is possible. Only when it is clear that the amicable resolution of a dispute is not possible is the ‘Notice for Arbitration’ filed. 

See also

MYSTERY OF SWAZI KING’S 10m LOAN
KING AT CENTRE OF IRON MINE FAILURE
 
ONLY KING GAINS FROM MINE FAILURE
http://swazimedia.blogspot.com/2015/02/only-king-gains-from-mine-failure.html